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On mining bill, Republicans once again sleepwalking through bad public policy

Submitted by Man MKE on February 19, 2013 - 12:13pm

Sometimes you have to translate political talk into plain English to understand what's really going on.

The Fitz in "Fitzwalkerstan" said recently that Republicans in Madison will refuse to consider any change in proposed state mining legislation that would put in place a net-proceeds tax on the amount of iron produced by a mining company. State Sen. Scott Fitzgerald, Senate majority leader, also told a business group that instituting an alternative tonnage tax “sends the wrong message” to the mining company.

TRANSLATION: "Republicans want this mine so badly we're letting Gogebic and other mining companies have what they want, which is lower taxes. Also, state government is going to keep a lot of those lower tax revenues and not give all of the money back to local communities affected by the mining, like the current law does."

See, it's a lot easier to understand when you say it in English. If the shoe Fitz...!

The thing about a net proceeds tax is that companies are pretty adept at writing off losses and moving money around so that even when the firm is very profitable, net proceeds can be very low, or even sometimes nonexistent. Meanwhile, without a tonnage tax, most of the actual value of any ores removed from Wisconsin will not be shared with citizens or their government. Corporate plunderers and pillagers, rejoice!

Just as bad, the bill cuts the amount of tax revenue returned to local governments near the mine by 40 percent compared to the current mining law.

Fitzgerald said a tonnage tax, which is the way smart states like Minnesota retain more of the wealth created by mining, would “go completely against everything we have worked for over the last two years to state that Wisconsin is open for business.”

TRANSLATION: "Wisconsin is open to letting business do what it wants, and screw the taxpayers if they don't like it."

Note that Democrats have argued for the tonnage tax.

Now, above and beyond all this, Gogebic's proposed Penokee Range mine would be terrible for the state's environment, terrible for everyone downriver including the Bad River tribe, and terrible for pristine Lake Superior. It would result in great costs to affected landowners and all taxpayers, so any relaxed mining regulations would not be a good deal at all. But thanks to Republicans who are in charge of the Capitol, we're going to get a bill so relaxed it's positively sonambulistic.